During the 2009 euro crisis, a number of countries had private banks that had become too "big to save." Explain
What will be an ideal response?
A private bank is too big to save if the resources available to the home government through the central bank are insufficient to prevent bank failure. Essentially, saving the private bank would lead to a sovereign default by a countries government and so was not feasible.
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Collective bargaining between unions and employers often lead:
A) to wages that are lower than what workers would have received at equilibrium. B) to reduction in the unemployment rate. C) to wages that are higher than what workers would have received at equilibrium. D) to wages equal to what workers would have received at equilibrium.
In a business cycle recession, which of the following occurs?
A) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve but no shift in the curve. B) Investment demand increases and the demand for loanable funds curve shifts rightward. C) Investment demand decreases and the demand for loanable funds curve shifts leftward. D) The quantity of investment demanded decreases and there is a rightward shift of the demand for loanable funds curve. E) The quantity of investment demanded decreases increases and there is a movement up along the demand for loanable funds curve but no shift in the curve.